Summary
McKesson Corporation (MCK) announced on June 13, 2007, the execution of an Amended and Restated Credit Agreement, effective June 8, 2007. This agreement establishes a $1.3 billion, five-year senior unsecured revolving credit facility for McKesson Corporation and McKesson Canada Corporation. The facility replaces a previous agreement and allows for borrowings at floating interest rates based on either a base rate/Canadian prime rate or a Eurodollar rate. This action is primarily for general corporate purposes and indicates the company's ongoing access to substantial funding for its operations and potential growth initiatives. Notably, the company had minimal borrowings outstanding under the previous facility at the time of renewal, suggesting a conservative approach to debt utilization. The new credit agreement includes standard covenants, such as a maximum debt to capitalization ratio, which are similar to the prior arrangement. Investors should view this as a positive step, reinforcing the company's financial flexibility and its ability to manage its liquidity needs through established banking relationships.
Key Highlights
- 1McKesson entered into a $1.3 billion, five-year senior unsecured revolving credit facility.
- 2The new credit facility replaces a prior agreement and is effective as of June 8, 2007.
- 3The credit facility is available to McKesson Corporation and McKesson Canada Corporation.
- 4Borrowings will bear interest at floating rates (base rate/Canadian prime or Eurodollar rate).
- 5The company had minimal borrowings outstanding under the previous facility.
- 6The facility is intended for general corporate purposes.
- 7The agreement includes covenants, such as a maximum debt to capitalization ratio, similar to the previous facility.